Top Interest Rate Headlines 10-28-2011: Eurozone Bond Yields Show No Sign of Having Been Cured

Eurozone Bond Yields Show No Sign of Having Been Cured
By Mark Gongloff, WSJ.com
The eurozone Plan to Save the World has made US stock charts look like somebody lit a fuse under them, but on charts of eurozone sovereign bond yields, the Plan has left no evidence of its existence.
http://jlne.ws/tNy9yC

TeraExchange to Launch Central Limit Order Book for Swaps and OTC Cleared Derivatives
Press Release
SUMMIT, N.J. and WASHINGTON, Oct. 28, 2011 /PRNewswire/ -- New OTC derivatives trading venture TeraExchange (www.TeraExchange.com) is preparing to launch one of the world's first central limit order books for OTC cleared derivatives in Q4 2011.  The initiative positions TeraExchange to seize "first mover" advantage as sweeping regulatory reform reshapes the world of trading and clearing OTC derivatives.
http://jlne.ws/vBtjV9

Mortgage probe may open new path for housing relief
By Aruna Viswanatha and Rick Rothacker, Reuters
A controversial weapon could be deployed soon in the U.S. fight against the housing crisis as states and top banks near a deal in their dispute over mortgage abuses -- cutting the mortgage debt owed by homeowners.
http://jlne.ws/uiFOMp

NY Fed: ECB Dollar Borrowing From Fed Stable at $1.853 Billion
By Michael S. Derby
The European Central Bank remained the only borrower at the Federal Reserve’s dollar swap borrowing facility, the New York Fed said Thursday.
http://jlne.ws/ti4vxG

Squeeze on lending in China has prompted some businesses short of cash to stop paying wages to blue-collar workers
The Economist
EFFORTS to curb inflation in China are having some painful side-effects. A squeeze on bank lending has prompted some businesses short of cash to stop paying wages to blue-collar workers. Even the much-vaunted state sector is feeling the pinch. Work has all but ground to a halt on thousands of kilometres of railway track, and many of the network’s 6m construction workers have been complaining about not being paid for weeks or sometimes months.
http://jlne.ws/tAP1vN

Relieved US banks sell $5bn of debt in a week
FT.com
http://jlne.ws/rxBBiq

Stats on the widening income gap between the rich and poor in the U.S.
The city of Atlanta had the highest income inequality rate in the country from 2005 to 2009, just ahead of New Orleans, Washington, D.C., and Miami, according to a U.S. Census Bureau report.
http://jlne.ws/uyuCWj

Chart: Personal saving rate declines to 3.6 percent from 4.1 percent
http://bit.ly/rDFz5l

Erste Bank Slashes CDS 94%, Looks To Exit Remainder In Days
Global Finance
Austria's Erste Group Bank AG (EBS.VI, EBKDY) said Friday it had cut the net volume of credit-default swap insurance it has sold by 94% over the last month as the Austrian bank scrambles to reduce its exposure to peripheral euro-zone sovereign debt.
http://jlne.ws/vPsp8S

Calling Bankers’ Bluff, Merkel Won Europe a Debt Plan
By STEVEN ERLANGER and STEPHEN CASTLE, the New York Times
In the end, it was Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France against the European banking establishment — and the bankers blinked.
http://jlne.ws/to341f

Euro zone rates on hold as guard changes
By Sakari Suoninen, Reuters
Euro zone interest rates will very likely remain on hold next week as the European Central Bank navigates the transition to new leadership, with an anti-crisis plan forged by EU leaders taking some heat off monetary policymakers.
http://jlne.ws/tbR2RU

What Does 'Recapitalizing Banks' Actually Mean?
By UWE E. REINHARDT, The New York Times
In a recent lead editorial, “Will Mrs. Merkel Wake Up This Time?” The New York Times lectured Chancellor Angela Merkel of Germany on her and her citizens’ duties toward nations that have lived for years beyond their means and now need financial aid, and toward European banks that through their lax and myopic loan policies aided and abetted the living beyond means.
http://jlne.ws/vhNKEj

Consumer spending up in September on savings
By Lucia Mutikan, Reuters
Sluggish income growth led U.S. households to cut back on saving in September to raise their spending, showing the economy's recovery remains fragile.
http://jlne.ws/tDbXoI

Growth of Japanese banks in the FX market
Celent
The Japanese banks have grown their global FX volumes market share tremendously in the last year by winning western money management clients and hedge funds as well as the Japanese FX volumes which were generally routed through their Western counterparts.
http://jlne.ws/towILx

Dodd Frank’s long-distance paper chase
By Gillian Tett, Financial Times
A couple of days ago, a senior banker in New York showed me a memo that he had just received from his lawyers about the so-called Volcker rule for proprietary trading. This stretched to 82 pages on an iPad, replete with dense charts. And that was merely his summary document; the “full” explanation ran to several hundred more pages. “It’s mad!” he sighed, explaining that this was only one of several memos he had recently received on Dodd-Frank and Basel rules.
http://jlne.ws/ufoha7

What Does ‘Recapitalizing Banks’ Actually Mean?
By UWE E. REINHARDT, NY Times
In a recent lead editorial, “Will Mrs. Merkel Wake Up This Time?” The New York Times lectured Chancellor Angela Merkel of Germany on her and her citizens’ duties toward nations that have lived for years beyond their means and now need financial aid, and toward European banks that through their lax and myopic loan policies aided and abetted the living beyond means.
http://jlne.ws/vOhu09

Shadow banking surpasses pre-crisis level
FT Finance News (ext) via Yahoo! Finance
The shadow banking system, the host of lightly regulated entities that compete with banks to provide credit, is bigger than it was before the financial crisis, despite growing efforts by regulators to ...
http://jlne.ws/taSS10

Fed Willing to Gamble on Short-Run Trade-Off: Caroline Baum
Bloomberg
Economists may not see eye to eye on much, but over the years I've found a few core concepts on which all but the most politically motivated would agree.
http://jlne.ws/uxhswB

Inside Deutsche Bank Debate on U.S. Sliding Into Japan Malaise
Bloomberg
Deutsche Bank AG’s Ajay Kapur says the U.S. is sliding into an economic malaise similar to Japan’s so-called lost-decade of the 1990s. The Hong Kong-based strategist draws the parallel using similarities in demographics and financial-market performance.
http://jlne.ws/rAI5Bk

Nordic Banks 'Punished' as EBA Tests Penalize Mortgage Assets
BusinessWeek
Nordic banks are being penalized by European rules that assign tougher risk weights to mortgage assets than local regulators, forcing lenders to scrap payouts for shareholders to fulfill capital rules.
http://jlne.ws/vsxMNP

Banco Popular profits fall ahead of merger
By Victor Mallet in Madrid, Financial Times
Banco Popular, the Spanish bank that is buying the smaller Banco Pastor in the latest move to consolidate the country’s financial sector, said its net profit in the first nine months of the year had fallen to E404m, in line with analysts’ forecasts and down 23 per cent from the same period last year.
http://jlne.ws/unIe7L

Citigroup hires Hubble from ICE Clear Europe
FT Finance News (ext) via Yahoo! Finance
Citigroup (NYSE:C) has poached Suzanne Hubble, a senior executive from ICE Clear Europe, as it attempts to become a big beneficiary of the deep reforms reshaping US and European markets.
http://jlne.ws/sibN0Z

EU banking package to restore conficence in the capital markets
Press Release
The Austrian Financial Market Authority (FMA) and the Oesterreichische Nationalbank (OeNB) welcome yesterday's adoption by the European Council and the Euro Summit of the Heads of State or Government of a comprehensive set of measures aimed at restoring confidence in the financial markets.
http://jlne.ws/vC768E